Convenience is the word here. With many car companies having their own lending affiliates like GMAC (General Motors Acceptance Corporation) you can choose a car and a loan in one application process. The process is usually quicker than applying for a bank loan, and dealers are more likely than banks to qualify buyers with less-than-perfect credit ratings.
They also usually help customers with special needs, like first-time buyers and recent college graduates. Best of all, car companies sometimes offer low-rate promotional financing on certain models. (But don't expect discount financing on popular models.) The downside? Dealer financing can be more expensive, particularly for poorly informed buyers. (Dealers can sometimes make as much on the financing as on the sale itself!)Negotiate the car's price before you talk about the terms of a loan, so the dealer can't hike the car's price to give you a lower-rate loan. Even if you get low dealer financing rates of 2% to 5%, there's a catch: these loans are usually short term. Since many must be repaid in 24 months, monthly payments can be steep.
